BayCom Corp (BCML) Reports Q3 2023 Earnings of $6.6 Million Amidst Industry Challenges
BayCom Corp (NASDAQ:BCML) reported Q3 2023 earnings of $6.6 million, a decrease from Q2 2023 earnings of $7.2 million and Q3 2022 earnings of $7.0 million.
Net income for the third quarter of 2023 decreased by 8.0% compared to the second quarter of 2023, primarily due to a $1.9 million increase in provision for credit losses.
Net income for the nine months ended September 30, 2023, increased by 30.6% compared to the same period in 2022, primarily due to a $4.1 million increase in net interest income and a $4.1 million decrease in provision for credit losses.
Despite industry challenges, BayCom Corp's financial indicators remain stable, with a net interest margin exceeding 4.0%, a return on assets surpassing 1.0%, and an improving efficiency ratio.
BayCom Corp (NASDAQ:BCML), the holding company for United Business Bank, announced its earnings for the third quarter of 2023 on October 19, 2023. The company reported earnings of $6.6 million, or $0.56 per diluted common share, a decrease from earnings of $7.2 million, or $0.59 per diluted common share, for the second quarter of 2023 and $7.0 million, or $0.52 per diluted common share, for the third quarter of 2022.
Financial Performance
Net income for the third quarter of 2023 decreased $576,000 or 8.0%, primarily as a result of a $1.9 million increase in provision for credit losses. This was partially offset by a $528,000 increase in net interest income, a $568,000 increase in noninterest income, and a $224,000 decrease in provision for income taxes.
Comparing the third quarter of 2023 to the same period in 2022, net income decreased $340,000 or 4.9%, primarily due to a $728,000 decrease in noninterest income and a $423,000 increase in noninterest expense. However, this was partially offset by a $520,000 decrease in provision for credit losses, a $84,000 increase in net interest income, and a $207,000 decrease in provision for income taxes.
Year-to-Date Performance
Net income for the nine months ended September 30, 2023, compared to the same period in 2022, increased $4.9 million or 30.6%. This increase was primarily due to a $4.1 million increase in net interest income and a $4.1 million decrease in provision for credit losses. However, this was partially offset by a $891,000 decrease in noninterest income and a $2.4 million increase in provision for income taxes.
Commentary from the CEO
George Guarini, Founder, President, and Chief Executive Officer of BayCom Corp, commented on the company's performance. He stated,
Our financial performance for the third quarter of 2023 remained resilient despite the challenges confronting the banking industry. Similar to other banks, we experienced some pressure on our net interest margin, but this appears to have eased somewhat in the recent quarter. During the quarter, we proactively bolstered our loan loss reserves, primarily in response to specific loans. On the whole, our credit quality remains solid, and we have not identified any systemic credit issues within our loan portfolio."
Guarini concluded,
Our financial indicators remain stable, with a net interest margin exceeding 4.0%, a return on assets surpassing 1.0%, and an improving efficiency ratio. Our liquidity and deposit levels have held steady throughout the quarter. We are committed to enhancing our tangible book value through earnings and the repurchase of our shares, which are currently trading well below our tangible book value. Additionally, we maintain the belief that merger and acquisition opportunities may arise as other banks recognize the advantages of consolidation in the current operational environment."
Third Quarter Performance Highlights
BayCom Corp's net interest income increased $528,000, or 2.2%, to $24.8 million for the third quarter of 2023 from $24.3 million in the prior quarter, and increased $84,000, or 0.3%, from $24.7 million in the same quarter a year ago. The increase in net interest income reflects increases in interest income on loans, federal funds sold, and interest-bearing balances in banks.
Noninterest income for the third quarter of 2023 increased $568,000, or 52.3%, to $1.7 million compared to $1.1 million in the prior quarter of 2023 and decreased $728,000, or 30.6%, compared to $2.4 million for the third quarter of 2022.
Noninterest expense for the third quarter of 2023 decreased $38,000, or 0.2%, to $16.5 million compared to $16.6 million for the prior quarter of 2023, and increased $423,000,
This article first appeared on GuruFocus.
